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Strangle action out of the gate in CVS, Biogen Idec
Karla hosts and produces Options News and Mad About Options, and writes the Sidewinder report. Karla graduated from Colgate University, where she majored in English and Film and Media Studies. Yesterday morning, CVS Caremark (NYSE: CVS) announced earnings of 79 cents a share, which beat estimates by one cent. The company’s stock is currently down five cents to $32.67 per share, and it looks like an investor is betting that the stock could remain relatively unchanged throughout the longer-term. The January 2011 30-35 strangle crossed 5,000 times out of the gate thanks to an investor who sold these spreads for $5.08. The investor is calling for volatility to come in and range-bound movement in the stock.
Biogen Idec Inc. (NASDAQ: BIIB) announced earnings of $1.20 per share this morning, which beat estimates by 15 cents a share. The company also issued upside guidance for the year, which sent the stock up 86 cents, or 1.6%, to $53.70 during the first 30 minutes of trading. We saw heavy strangle action out of the gate, as an investor sold the March 50-55 strangle and simultaneously bought the March 45-60 strangle 4,000 times. The investor collected a net premium of $1.50 for the package, also referred to as an iron condor.
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